The battle to acquire Dana Petroleum by State-owned Korea National Oil Corporation (KNOC) is nearing an end after the UK-listed oil explorer finally relented to meet the Korean oil giant to discuss its £1.7 billion takeover offer on shareholder's pressure.

The board of Dana late last night agreed to meet with KNOC this week following shareholders pressure to open a dialogue with Anyang, South Korea-based KNOC.

KNOC held preliminary talks with Dana that started in late June, which ended abruptly, (See: South Korea's KNOC in talks to buy UK's Dana Petroleum)  forcing KNOC to make a £17-per-share cash offer to Dana on 2 July and followed it up by raising its bid to £18 on 20 July after Dana announced that it has discovered new oil in Egypt.

But despite its latest offer that valued the Aberdeen, Scotland-based Dana at £1.7 billion, the board of Dana refused to engage with KNOC on the grounds that it required the state-owned Korean company to show that it has the necessary finances in place to fund the deal.

Dana voiced its concerns publicly on 30 July by saying in a statement that it did not believe KNOC had enough "comfort on financing and other execution risks."

KNOC, which had maintained that it would not like to make a hostile takeover but would like to conduct due diligence, secured funding guarantees from a group of Asian creditors and gave it on 30 July, the same day that Dana voiced the funding capability of KNOC, to RBS Hoare Govett and Royal Bank of Canada, Dana's advisers.

According to a commentator, asking KNOC to show its creditworthiness was immature Dana's part, as the Korean company is sitting on a cash pile of $6.5 billion and has lately been on the prowl for acquisitions in order to double its production from 130 million barrels a day to 300 million bpd by 2012.

KNOC has also indicated that it would like to retain some of Dana's top management as it has no experience in the North Sea operations of Dana.

KNOC is believed to have spoken to a few of Dana's investors about its takeover offer, many of whom have supported its £18 bid, while some minority shareholders were seeking a £20 offer.

London-based asset management firm Schroders, the biggest shareholder in Dana with a 16-per cent stake and other investors like BlackRock and JP Morgan Asset Management have asked Dana's founder and chief executive Tom Cross to hold discussions and open its books to KNOC, saying that the Korean company's offer is fair.

Cross, with his holding of little over 2 per cent, would stand to gain about £34 million if the deal has to go through.

But since KNOC made its initial offer of £18 is final and is based on the principle of 'take-it-or-leave-it', Dana's investors are worried that the company's stock price, which had risen sharply by 45 per cent from £11 prior to KNOC's bid in late June to £17.11 on 30 July, could fall sharply if KNOC werre to walk away from the deal.

Dana currently produces from 54 including 15 new offshore fields and 3 new onshore fields across four countries and holds more than 100 interests in exploration and production licenses spanning nine countries.

Dana's activities are focused within its two core areas of Europe (North Sea) and Africa. In Africa, Dana has production, development and exploration interests across Egypt, oil and gas discoveries offshore Mauritania and Morocco, and additional exploration opportunities offshore Senegal and Guinea.

Since 2008, KNOC has acquired US-based Ankor Energy that produces crude oil and gas from its five oil fields in the Gulf of Mexico, Savia Peru, the largest private oil production and exploration company in Peru, Canada's Harvest Energy, one of Canada's largest oil producers and refiners and Kazakhstan's Sumbe, which owns two oilfields in western Kazakhstan.